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Energy Blog Energy Firms Will Pass on Savings from Green Levy Cuts

Energy Firms Will Pass on Savings from Green Levy Cuts

Chris Hurcombe
by Chris Hurcombe December 3, 2013
131202_Businesses groups call for action on energy costs

UK Chancellor George Osbourne has stated he is “absolutely insistent” that customers will see reductions on their energy bills should the government bow to pressure from energy companies to make further cuts to green levies. Speaking on the BBC’s Andrew Marr Show this week, Osbourne said ”We are absolutely insistent that this is passed on. I am pretty clear with you that it is going to happen. This government has taken step after step and the amount of tax we collect from people who were previously avoiding their tax goes up by billions of pounds over this parliament,”

After an increase in prices from the big six energy companies, the government has worked closely with energy firms to see what could be done to stabilise prices. One such measure is cutting the amount of financial burden that energy companies are expected to shoulder in order to improve energy efficiency in Britain’s homes.

Since October, Prime Minister David Cameron and Deputy Prime Minister Nick Clegg have announced plans to spread these green levies across two years rather than one, and promised a £1,000 grant for home buyers to spend on energy improving measures in lieu of schemes run by energy firms.

Additionally, Ministers have agreed to further scale back the Energy Companies Obligation (ECO), which resulted in the big six unanimously agreeing this would be passed on to customers with most suggesting this would freeze prices for the entirety of 2014.

Far from a ‘Win/Win’ situation, there has been much criticism of the cuts, with the number one fear being that energy companies now feel they have a measure of control over how the government will tax them.

Andrew Warren, director of the Association for the Conservation of Energy, even went as far as to say the energy companies now have ‘“a taste for blood”. “

It is absolutely disgraceful that the big energy companies have orchestrated this unscrupulous campaign, that appears to be succeeding in blackmailing the UK government into cutting by half its established policy to require energy companies to help customers stop wasting money by wasting fuel,” he said.

Energy Secretary Ed Davey, however, told ITV news that energy companies had already pushed for further cuts, and ministers had stood firm on the matter and closed the door on the issue of further cuts.

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